Technically the MKT is in NEUTRAL TRANSITION and difficult trading conditions are expected. The MKT has produced a negative technical signal which must be confirmed below the 11042 Inflection Pivot if the signal is valid. Roll with any new weakness and leverage up if good risk parameters present themselves. The potential to get in at the beginning of a new move lower is real. A held trade above 11042 and a quick positive shift is expected.
On the SELL side be more aggressive after the previous session low is taken out. Not that this is a pre-condition but should be noted as a confirmation of weakness. BREAKOUT strategies below 11042 and the 10989 support pivot should just "go" so keep risk parameters tight. FADE into any positive reaction off an unsuccessful downside BREAKOUT. Use a REVERSAL strategy to leverage up back under the original failure point. If the integrity of the previous session low remains intact, avoid REVERSAL strategies as any break in the negative momentum is a positive signal that the MKT is going to return to its neutral posture. FADE strategies against the 11095 resistance pivot are recommended early in the session or near the end. The negative signal will either play out from the get go or will weigh on the MKT in the latter stages of the trading session.
On the BUY side REVERSAL strategies can be executed off of major support levels [11042 and 10989] at or near the previous session low point. Avoid this strategy on lower levels as any new weakness has the potential to be the beginning of a move. If the integrity of the previous session low remains intact FADE strategies can be accepted at or near this inflection point on the initial test with tight profit target objectives. If the MKT has already had a reaction off this support area avoid this strategy. Use BREAKOUT strategies as a signal to FADE a negative pull-back off the 11042 Inflection Pivot after a confirm break in the negative momentum. Only take this trade if the previous session low point remains intact. Otherwise this will be a SELL REVERSAL opportunity.
Note: Transitional trading conditions are difficult and can be full of false stops and starts. Be ready for a move but be prepared to work for it.
JS
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